News New York Federal Court Finds that Business Pursuits and Rental Exclusions Preclude Coverage for Bodily Injury Claims Against a Multi-Family Investment Property Owner (NY) December 30, 2021 < Back Share to: In MIC General Insurance Corp. v. Cabrera, 20 Civ. 4855, 2021 WL 5909975 (S.D.N.Y. Dec. 10, 2021), the Southern District of New York recently awarded summary judgment to an insurer based upon several exclusions in a policy issued to the owner of an investment property. The owner rented the two-family home to a total of twenty people and his tax returns reflected substantial income and tax deductions relating to the property. The owner also certified that the property was “rented” when applying for insurance and generally took care of repairs and maintenance himself. One of the tenants was injured in a slip and fall accident on the property and sued the owner in New York state court, alleging that the owner negligently failed to remove ice from a sidewalk on the property. The insurer disclaimed coverage on several grounds, including that the Business Pursuits Exclusion and Rental Exclusion applied under the circumstances. However, the insurer sought declaratory judgment but provide a courtesy defense to the owner until the coverage issues were resolved. The insurer moved for summary judgment on the exclusions. In evaluating the Business Pursuits Exclusion, the Court noted that the insurer must show that: 1) that the owner ran the premises as a business; 2) that he had a duty to keep the sidewalk safe for tenants to walk on the property which arose from the nature of the business; and 3) that the tenant’s injury resulted from the owner’s failure to carry out that duty. As to the first element, the court observed that whether an activity is a business pursuit within the exclusion under New York law depends on whether the insured “regularly engaged in a particular activity with a view toward earning a livelihood or making a profit.” To constitute a business, there must be two elements: “first, continuity, and secondly, the profit motive” (citations omitted). The court found that the insurer satisfied the first element as the owner earned income from renting the property and took care of the maintenance himself. As for the other elements, the court found that “[u]nder New York law, by virtue of renting out the [property] for profit, owed his tenants the duty…to keep common areas such as sidewalks reasonably safe.” Since the court further found that the tenant’s injury resulted from the owner’s failure to satisfy that duty, the Business Pursuits Exclusion applied to exclude coverage. The rental exclusion in the policy precluded coverage for bodily injury that arose “out of the rental or holding for rental of any part of the” property.” The exclusion contained an exception where the property was “in part for use only as a residence, unless a single-family unit is intended for use by the occupying family to lodge more than two roomers or boarders.” The court evaluated whether the “unless” clause was triggered, finding that the 19 people that lived at the property, other than the injured tenant, were “roomers.” As such, the court found that the “unless” clause was triggered, and the Rental Exclusion also applied to preclude coverage. The takeaway from this case is that insurers of residential investment properties may have grounds to exclude coverage where their policies contain business pursuits and/or rental exclusions under the appropriate circumstances. It is also important for insurers to fully understand the circumstances of each risk and to tailor their policies accordingly. Thank you to John Diffley for his contribution to this article. Please contact Andrew Gibbs with any questions. Previous Next Contact

News Juries: Always Unpredictable (NY) June 21, 2019 < Back Share to: In Ankney v Mohamad, the plaintiff was struck by a motor vehicle while riding his bicycle adjacent to a public park, sustaining numerous injuries including a commuted displaced fracture of the clavical, a fractured scapula and three fractured ribs. The matter ultimately proceeded to trial on the sole issue of damages, where plaintiff relied upon certified medical records confirming each of his injuries, as well as testimony of his own pain and suffering, which included over one hundred physical therapy sessions over the course of a year. Notably, defendant made no attempt to contest the cause or severity of plaintiff’s injuries, offering no evidence at all at trial. You read that right, a damages only trial with no defense presented to combat the causal nature of the injuries or the severity of the injuries. Nevertheless, as a testament to the unpredictable nature of a jury trial, the jury returned a verdict finding that plaintiff had suffered no pain and suffering as a result of the accident, despite the overwhelming evidence presented. Plaintiff immediately moved to set aside the jury verdict, pursuant to CPLR 4404(a), which provides that the verdict in a jury trial may be set aside if there is no rational interpretation of the evidence which would justify the jury’s conclusion. Not surprisingly, the court agreed with plaintiff, noting that “[t]his Court has never seen a verdict which so obviously must be set aside. There is no possibility that any rational person could under any circumstances ever find that [plaintiff]… endured no pain and suffering.” As such, the verdict was set aside and a new trial was ordered. While defense attorneys always seek low verdicts, this finding was a loss for the defense, as they now have to spend more money trying this case all over again. Thanks to Tyler Rossworn for his contribution to this post. Please contact Georgia Coats if you have any questions. Previous Next Contact

News Deemer Statue Leads to Dismissal of Damages (NJ) April 6, 2018 < Back Share to: In Sulpizi v. LM General Insurance, plaintiff appealed from the trial court's dismissal of his claim for PIP benefits under the Deemer Statute, and the appellate court reviewed the lower court's decision on appeal. Plaintiff, a resident of Pennsylvania, owned a vehicle that has a Pennsylvania automobile insurance policy provided by defendant. Plaintiff also owned a vacation home in New Jersey. The underlying action arose when plaintiff was at his NJ home when he decided to mail a letter. He drove his car from his home and parked across the street from a mailbox. Plaintiff exited his vehicle and began to walk across the street towards the mailbox. As he crossed the street, he saw a pickup truck approaching him and he rushed to the side of the road. He tripped and fell on the curb near the mailbox resulting in personal injuries. Plaintiff's Pennsylvania automobile policy issued by defendant provided $5,000 in PIP medical benefit coverage. Plaintiff submitted a PIP claim to defendant for benefits exceeding $5,000, claiming he was entitled to $250,000 in additional coverage under the Deemer Statute. NJ's Deemer Statute applies to out-of-state driver who are injured in accidents in New Jersey. Under the Deemer Statute, if you are an out-of-state resident and you are hurt in an accident in New Jersey, you will be subject to New Jersey’s restrictive limitation on lawsuit or “verbal threshold” if your insurance company is licensed to transact business in New Jersey. The verbal threshold places limitations on the right to recovery for injuries sustained in a motor vehicle accident. The appellate court reviewed whether the Deemer Statute requires coverage for a claim involving a pedestrian injured after parking his car and while walking across the street. The court determined that the coverage under the Deemer statute demanded a substantial nexus between the out-of-state vehicle and the accident for which benefits were sought. The court opined that because plaintiff never came into contact with the oncoming vehicle and was injured as he moved out of the way, there was no nexus between his use of his vehicle and the resulting injuries. The appellate court thereby afirmed the trial courts ruling and maintained the dismissal against defendant. Thanks to Steve Kim for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Findings Of Plaintiff's Own Doctor Subvert His Serious Injury Claim February 15, 2008 < Back Share to: In Sharma v. Diaz, 2008 NY Slip Op 01130, AD Index 2007-05350, Kings Co. Index 27745/04, a case involving a motor vehicle accident, plaintiff claimed to have sustained neck and lower back injuries, including herniated and bulging discs with radiculopathy. The defendant moved for summary judgment asserting the plaintiff did not sustain a serious injury pursuant New York Insurance Law §5102(d). As part of his motion, the defendant relied upon the findings of plaintiff's treating physician, who examined the plaintiff within three months of the accident and found that plaintiff possessed full range of motion in the cervical and lumbar regions of his spine. Despite this, the trial court denied defendant's motion finding that the defendant failed to meet his prima facie burden that the plaintiff did not sustain a serious injury. In reversing the trial court and granting defendant's motion for summary judgment, the Appellate Division - Second Department found that the defendant had established his entitlement for summary judgment. Since the plaintiff failed to provide any medical evidence to counter defendant's motion, the appellate court deemed the aforemention findings of plaintiff's own treating physician fatal to his claim. Furthermore, the court held that the mere existence of disc herniations and bulges with radiculopathy, without objective evidence demonstrating the extent of physical limitation, insufficient to prove serious injury. http://www.nycourts.gov/reporter/3dseries/2008/2008_01130.htm Previous Next Contact

News Civil Partner is not Spouse and Not Eligible to Collect Workers Comp Death Benefit December 28, 2007 < Back Share to: A NY appellate court has ruled in Matter of Langan v. State Farm that a partner to a civil union is not a marital spouse and therefore not eligible to collect death benefits as a surviving spouse under NY's Workers Compensation Law. The court ruled that a civil union - although a recognized legal relationship - is not a marriage and any change in the awarding of workers compensation benefits is for the Legislature to decide. Previous Next Contact

News Patching Elevated Gutter Pipe Not Within Purview of Labor Law &#167;&#167; 240(1) and 241(6) January 7, 2008 < Back Share to: In Azad v. 270 5th Realty Corp, 2007 NY Slip Op 10086, AD Index 2007-04164 (Kings Co. Index Index 7390/05), the plaintiff was injured while he repaired two holes in a gutter pipe approximately 35 feet up on the outside of a building owned by the defendant. Specifically, plaintiff fell when his ladder, that plaintiff placed on top of garbage, shifted. In reversing the trial court's decision that had granted plaintff summary judgment on his Labor Law §§240(1) and 241(6) claims and awarding summary judgment to the defendant landowner, the Appellate Division - Second Department determined plaintiff was not performing any of the protected activities enumerated under Labor Law § 240(1), but was merely performing "routine maintenance." Similarly, the Appellate Court found plaintiff's work was not construction, excavation or demolition work and therefore and did not qualify for a Labor Law §241(6) claim. http://www.nycourts.gov/reporter/3dseries/2007/2007_10086.htm Previous Next Contact

News NJ Supreme Court Rejects Harassment Suit: "Just Say No" August 14, 2008 < Back Share to: In a rare victory for the defense in an action for sexual harassment, the New Jersey Supreme Court affirmed the dismissal of a case brought by two female students against the Princton Theological Seminary. The students alleged that they were harassed by an older alumnus of and contributor to the Seminary who resided in close proximity to the campus. In ruling against the students, the Supreme Court emphasized that the pair failed to demonstrate that they were victims of "severe and pervasive" harassing conduct. Further, in evaluating whether this burden was met, it stressed that the offending conduct should be measured against "a reasonable person" standard, not the subjective effect of the actions on a given plaintiff. But the most encouraging part of the opinon was the court's reliance on good, old fashioned common sense. With no legal citation given or required, the court noted: "it is important in that regard that neither of these women used her own authority to tell Miller to 'go away.' They cannot rely on the prospect of a money damages award from the Seminary to replace their own obligation to simply tell Miller that they had no interest in him romantically or even as a casual acquaintance." Well said. http://lawlibrary.rutgers.edu/decisions/supreme/a-64-07.opn.html Previous Next Contact

Eileen McGlyn Paralegal New York emcglyn@wcmlaw.com Professional Experience At WCM, Eileen: assists with a variety of general liability and automobile claims; coordinates discovery; prepares and coordinates documents for dispositive briefings and trial preparation. Eileen is the primary paralegal for our NY office. Before Join WCM, Eileen worked as a medical biller for a doctor’s office in Staten Island. News I'm a paragraph. Click here to add your own text and edit me. It's easy. Download Bar Admissions

News First Department Gives WCM a Unanimous Victory in Art World Title Controversy February 16, 2018 < Back Share to: In a matter a first impression certain to benefit art insurers everywhere, New York’s Appellate Division, First Department unanimously agreed with WCM’s argument that a fine arts dealer all-risk policy insuring against loss or damage to works of art does not provide coverage for defective title. In DAE Associates, LLC v. AXA Art Ins. Corp. et al., the plaintiff, an innocent art gallerist, fell victim to a scheme perpetrated by an infamous thief, now convicted felon, James Meyer. For 26 years, Meyer was the trusted studio assistant of iconic American artist, Jasper Johns. Between 2006 and 2012, Meyer stole a number of artworks from Johns and then sold them to unsuspecting gallerists and collectors on condition the buyers could not sell or display the works for seven years, or sooner if Johns died. To make the curious caveat plausible, Meyer explained this proviso, telling the buyers the art was gifted from Johns and he would be embarrassed if Johns discovered the sale. In 2010, the plaintiff, Danese, was approached by an intermediary claiming to have Untitled, 2002-2005, Acrylic on paper, 37 ¼ x 30 inches, by Jasper Johns, for sale. As with other victims of Meyer’s scam, he was told the work was available on the condition the eventual buyer keep the work private and not sell or loan the work for seven years or until Johns died. After finding a couple willing to buy the work, Danese bought the work and then sold it to the couple for $898,218.75. In the contract of sale, Danese warranted he had marketable title to the work and agreed to rescind the purchase price in the event title proved defective. Three years after the sale, the FBI visited the couple to report the Johns hanging in their home was stolen. After returning the work to Johns, the couple sued Danese under the contract for a refund of the purchase price. Faced with a lawsuit for a refund of the sale price, Danese sued AXA for coverage under his Fine Arts Dealers All-Risk policy. That policy afforded coverage for “all loss or damage to insured property.” Danese argued coverage existed because he suffered a loss; the policy did not use the word “physical” to modify the words “loss or damage;” and, the policy did not contain an exclusion for defective title. AXA disagreed, arguing no coverage existed because there was no loss to the artwork itself; the plaintiff’s loss was purely financial, flowing from a simple breach of contract; and, to find coverage would effectively transform the all-risk policy into a title insurance policy, which Danese knew was a separate and more expensive product. After Judge Oing, then a Justice of the New York Supreme Court, granted AXA’s motion to dismiss, Danese appealed to the First Department. In opposition, WCM presented the issue before the court as follows: Renato Danese, with a number or other intermediaries, brokered the sale of a stolen work of art, Untitled, 2002-2005, by Jasper Johns to Perry and Donna Golkin for $898,218.75. Those sale proceeds were divided among the intermediaries, with $175,000.00 going to Danese. In his written contract with the Golkins, Danese agreed to refund the full $898,218.75 sale price if title proved defective. After the FBI seized the stolen work, Renato Danese turned to AXA, requesting indemnity for the full $898,218.75 sale price of the stolen work. Danese did so even with an admitted awareness that he did not have title insurance for such reimbursement. Judge Oing properly found that there was no fortuitous loss of the work itself, but ruled the loss arose from a purely financial transaction: Danese’s breach of the Golkin sales contract. Under these circumstances, should Judge Oing’s decision be disturbed? Earlier this week, the First Department unanimously answered that question with a resounding “No,” and ruled that “[t]he all-risk policy at issue, which covered insured property for ‘all loss or damage to insured property,’ did not apply to plaintiff art gallery's contractual liability to purchasers of stolen artwork that was returned to its rightful owner.” In doing so, the court accepted WCM’s argument that “[d]efective title is clearly not a physical loss or damage….from any external cause” and that “[d]espite the fact that the phrase ‘loss or damage’ in the policy was not qualified by terms such as ‘direct’ or ‘physical,’ [w]e may not, under the guise of strict construction, rewrite a policy to bind the insurer to a risk that it did not contemplate and for which it has not been paid.” Today’s decision is a significant victory for art and title insurers everywhere. By recognizing “[i]t is not reasonable to interpret a policy so broadly that it becomes another type of policy altogether,” the First Department provided assurance to art insurers that they will not be forced to pay title claims they never agreed to insure. And title insurers may now take comfort in a ruling that refuses to undermine their market by transforming occurrence-based policies into something they are not. AXA was represented by Dennis M. Wade and Michael A. Gauvin of Wade Clark Mulcahy, with Dennis arguing the matter before the First Department. If you have any questions, please call or email Dennis at dwade@wcmlaw.com . Previous Next Contact

News Out Of Possession Landlord Out Of Case (NY) December 22, 2016 < Back Share to: An out-of-possession landlord is not responsible for dangerous conditions existing on leased premises after the tenant takes possession unless the landlord retains control of the property, affirmatively creates the condition, or contracts to maintain it. However, what about when the landlord reserves the right to enter onto and use the premises from time to time? In Burgess v City of Glens Falls, a child fell through a missing bleacher plank at a field owned by the City of Glens Falls and leased to the Glens Falls Little League. While the lease gave the Little League exclusive right to operate the field to run its program, it also included a provision that allowed the City to request permission to use the field for certain scheduled events. The provision also gave the City the responsibility for any maintenance and repairs related to any such event. This right was exercised by the City from time to time, including ten months prior to the incident, when the City held an “Annual Summer Jam.” The plaintiff contended that the City’s occasional use precluded a finding that it was an “out-of-possession” landlord. The Supreme Court disagreed and ruled finding the reservation to be analogous to a right to re-enter that does not impair the City’s status as an “out of possession” owner. Thanks to Christopher Gioia for his contribution. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com . Previous Next Contact

News An Obligation To Procure Commercial General Liability Insurance Is Not Waived Unless Waiver Is Clear, Unequivocal And Deliberate (NY) April 8, 2022 < Back Share to: Where a party has a contractual obligation to procure a certain amount of commercial general liability insurance coverage, does the acceptance of a certificate of insurance constitute as a waiver of the insurance procurement provision if the party failed to procure the agreed-upon amount of coverage? According to the Appellate Division, First Department, the answer is no. In Benedetto v. Hyatt Corporation, 2022 WL 773978 (1st Dep’t 2022), a security guard was injured and brought a personal injury action against a hotel (“Plaintiff-Respondent”). Subsequently, Plaintiff-Respondent brought a third-party breach of contract claim against the security guard’s employer (“Defendant-Appellant”). The subject contract required Defendant-Appellant to acquire $3 million worth of commercial general liability insurance coverage. However, instead of procuring $3 million worth of commercial general liability insurance coverage, Defendant-Appellant obtained $2 million worth of commercial general liability insurance coverage and $1 million worth of umbrella liability coverage. As such, Plaintiff-Respondent moved for summary judgment for breach of contract. The Supreme Court, County of New York granted Plaintiff-Respondent’s summary judgment motion and Defendant-Appellant appealed. During the appeal, Defendant-Appellant argued that Plaintiff-Respondent waived the insurance procurement provision in the subject contract because Plaintiff-Respondent accepted Defendant-Appellant’s certificates of insurance even though the certificates did not reflect the agreed-upon $3 million worth of commercial general liability insurance coverage. However, the First Department noted that, by definition, a waiver is the intentional relinquishment of a known right, and a waiver must be clear, unequivocal and deliberate. Accordingly, the First Department held that Defendant-Appellant failed to raise an issue of fact because Plaintiff-Respondent’s acceptance of the certificates of insurance merely constituted “mere silence” or, at most, “mistake, negligence or thoughtlessness,” but never amounted to any intentional act to relinquish a known right. Therefore, Supreme Court’s decision was affirmed as Plaintiff-Respondent did not waive the insurance procurement provision in the subject contract. Thanks to Drew Fryhoff for his contribution to this article. Should you wish to discuss, please feel free to contact Tom Bracken. Previous Next Contact

News Time May Not Tell – Court Permits Malfunction Theory for 20-Years-Old Product October 21, 2022 < Back Share to: Just because a product was purchased almost 20 years ago, does not get manufacturers off the hook. In Smith v. Spectrum Brands, Inc., 2022 WL 3457822 (E.D. Pa. Aug. 17, 2022), plaintiffs brought a strict liability, negligence, and breach of warranty claim against the manufacturer and seller of a six-gallon aquarium tank that caused a fire and damaged the plaintiffs’ home. In 2002 or 2003, plaintiffs purchased an aquarium tank kit, including the pump motor. Plaintiffs used the tank a total of two years from the date of purchase until it burned in the fire in 2019. At other times it was stored and unplugged in a closet basement. The court denied defendants’ Motion for Summary Judgment as to plaintiffs’ claim for strict liability based on manufacturing and design defects. Defendants claimed that although the tank was used for only a total of two years, it was used intermittently over the course of sixteen years and used successfully during that time. However, the court responded that although the product was purchased approximately sixteen years before the fire, it was not in use for most of that time. Thus, a product’s prior successful use does not destroy the ability to utilize a malfunction theory for a strict product liability claim. Additionally, the court disagreed with defendants’ argument that plaintiffs could not proceed under the consumer expectations test because the product’s function was outside the experience of ordinary users, finding that jurors could readily assess the issue of unknowable and unacceptable dangers of the type of aquarium at issue. Manufacturers must be aware that a malfunction theory can be used to support a manufacturing defect claim when a product was purchased years, even decades, before an alleged defect, if the product was not used for most of the time from the purchase date up until the alleged defect. Thanks to Sarah Polacek for her contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact